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Location
The Pico Machay property is located in south-western Peru, and covers an area of 3,200 hectares.
Title
In February 2003, Monterrico granted an option to Minera Calipuy S.A.C., a wholly owned subsidiary of Canadian listed junior, Absolut Resources, to acquire up to 75% of the project. Absolut could earn 60% upon expenditure of US$2 million over four years, and could earn a further 15% by spending an additional US$2 million or completing a mine development before the fifth anniversary of the agreement.
Absolut committed to drilling at least 2,000m in the first two years following the grant of the option and to invest a minimum of US$450,000. Monterrico is in the process of reviewing Absolut's actual investment in the project.
Geology
The Pico Machay Project is hosted within the Tertiary volcanic belt of southern Peru as a high sulphidation epithermal deposit which is strongly structurally controlled. Original mapping outlined a 2.5 km x 1 km zone of advanced argillic alteration with a core area of 200m x 400m grading at >+1g/t gold on surface.
Absolut has completed an induced polarization survey to investigate the potential for a 'hidden' ore body. The geophysical results have confirmed the presence of a 1.4 km long by 400m down-dip by 150m thick resistive body, which expresses itself at surface as a vuggy silica unit -- a host rock amenable to gold mineralisation. Historic sampling of the main vuggy silica zone returned values averaging 1g/t Au over a broad area, and resampling by Absolut of this main vuggy silica zone returned 20m at 2.3g/t gold.
In addition, a separate high resistivity, low chargeability anomaly with dimensions of 1km by 400m is reported to have been detected 800m to the northwest of the main zone. This anomaly lies beneath shallow soil cover. Mapping and sampling in the area will be a priority in the upcoming field campaign.
History
The property was acquired by claim staking in 1994 by a subsidiary of Queenstake Resources. The property was optioned to Newcrest Mining (Australia) from Queenstake and actively worked from 1996 to 1998. A total of 1,848 m were drilled for eight holes from 192 to 279 m depths collared within various alteration-mineralisation zones. The best drill intercepts included 62m @ 0.75g/t Au and 26m @ 0.87 g/t Au.
In 2002, Monterrico acquired from Queenstake a 100% interest in the property with no work commitments in exchange for a 2.0% NSR.
Development
Absolut has executed an agreement of mutual understanding with the local community. An environmental baseline study has also been completed and approved by the appropriate government agency, in preparation for the drilling campaign scheduled to commence by mid-May.
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